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HMRC internal manual

VAT Registration

HM Revenue & Customs
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Appendix: specimen letter - exception to registration granted


You became liable to be VAT registered at the end of [month] and have asked to be excepted from VAT registration because you expect that your turnover in the next 12 months will not exceed [insert current deregistration threshold]. I am satisfied this will be the case and confirm that you are granted exception from VAT registration with effect from [date].

Please note that being granted exception doesn’t mean that you will never have to register for VAT. You need to carry on checking the value of your taxable supplies at the end of every month to find out whether another liability to register has arisen. For the first year following the date from which we granted you exception from registration, it’s important to include the turnover from before that date when you are working out the value of your taxable supplies in the last 12 months or less.

If you become liable to register again, you must tell us and either register for VAT or re-apply for exception from VAT registration.

[The following paragraph should be included unless you consider there is a risk to the revenue.]

If you became liable to register again before you received this letter, you don’t need to re-apply for exception from registration as long as

  • your turnover in the month just ending is less than [insert one twelfth of relevant deregistration limit], and
  • you have no reason to believe your turnover in the next 12 months will exceed [insert one twelfth of relevant deregistration limit]

It’s important that you let us know if you become liable to register again. If we don’t grant you exception, you will have to account for VAT on the supplies you have made since that date even if you didn’t charge VAT to your customers. Also, if you don’t let us know by the proper time, we may charge you a penalty which could be equal to the amount of VAT you should have paid us.